U.S. Treasury Department

IDENTIFICATION: Primary federal agency tasked to promote the prosperity and stability of the US economy by assisting in regulating financial institutions and markets and enforcing laws dealing with money, taxes, and related matters

SIGNIFICANCE: The Department of Treasury works to create a prosperous capitalist economy by regulating federal laws dealing with economic matters throughout the United States. This objective is also linked to the world economy, as the Treasury also works to assist and promote a healthy and vibrant economy for the many nations of the world.

In 1789, the US Congress created the Treasury Department of the United States and outlined and prescribed all the new department’s duties and responsibilities for maintaining, protecting, and assisting in the growth of the nation’s economy. The modern Treasury Department is the main federal agency tasked with maintaining and securing the economic safety of the United States.

The Treasury Department’s duties include a wide range of activities—from advising the president on any and all economic issues, to enhancing and creating corporate governance in financial institutions, assisting other nations to build a stable world economy, predicting and preventing global economic crises, and regulating and protecting the economy of the United States by enforcing the economic laws and tax laws needed to regulate appropriate growth and stability of the national economy.

Organization of the Department

The Treasury Department is organized in two major components: the departmental offices and the operating bureaus. The departmental offices are responsible for the formulation of policy and management for the entire department. The operating bureaus carry out the specific tasks assigned by the department and employ 98 percent of the department’s personnel. Different bureaus are tasked with numerous different responsibilities; however, they share a central mission: protecting and maintaining the United States economy.

The basic functions of the Treasury Department as a whole include producing postage stamps, US currency, and coinage; managing all federal finances, collecting federal taxes, duties, and all other moneys owed to the government; paying all bills that the United States owes to other nations; supervising national banks and credit institutions; advising other branches of the government, including the president, on financial and tax-related policies and issues; enforcing federal finance and tax laws; and investigating and prosecuting persons who counterfeit US currency and persons who evade paying taxes on regulated goods and services.

Before 2003, four other bureaus operated under the auspices of the Treasury Department. However, under the Homeland Security Act, in 2003 those bureaus were transferred to other departments and given revised investigative and protective missions. The four bureaus were the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Federal Law Enforcement Training Center, the US Customs Service, and the US Secret Service. In 2011, the Office of Thrift Supervision became part of the Office of the Comptroller of the Currency.

The four remaining Treasury Department bureaus with enforcement and investigative responsibilities are the Alcohol and Tobacco Tax and Trade Bureau, the Internal Revenue Service, the Financial Crimes Enforcement Network (FinCEN), and the Office of the Inspector General.

Alcohol and Tobacco Tax and Trade Bureau

The Homeland Security Act of 2002 divided the Treasury Department’s Bureau of Alcohol, Tobacco, and Firearms into two bodies with separate missions. The core of ATF was moved to the new Homeland Security Department, and the remainder of it was reconstituted within the Treasury Department as the Alcohol and Tobacco Tax and Trade Bureau (ATTB). The Homeland Security Act called for the tax collection functions to remain with the ATTB under the Department of the Treasury. The ATTB now collects alcohol and tobacco taxes owed to the federal government and works to ensure that alcoholic beverages are produced, labeled, advertised, and marketed in accordance with federal law. These duties date back to 1789, when Alexander Hamilton , the first Treasury secretary, suggested that under the new US Constitution, Congress should impose a tax on imported spirits to help pay the Revolutionary War debt.

Internal Revenue Service

The largest of the Treasury bureaus, the Internal Revenue Service (IRS) is responsible for determining, assessing, and gathering internal revenue in the United States. The IRS deals directly with more Americans than any other institution, public or private, in the United States. It also is one of the world’s most efficient tax administrators and collects more than two trillion dollars in taxes every year.

A major goal of the IRS is to ensure that all Americans understand and carry out their tax obligations to the government. This is not an easy task to accomplish. To ensure that all federal tax laws are carried out and administered fairly and justly, the IRS maintains a criminal investigation unit that employs about twenty-nine hundred special agents. They investigate violations of tax, money laundering, and Bank Secrecy Act laws. Although the IRS shares the jurisdictions of money laundering and Bank Secrecy Act violations with other federal agencies, it is the only agency that has sole investigative jurisdiction over criminal violations of the Internal Revenue Code.

The special agents who make up the law-enforcement arm of the IRS are some of the most elite financial investigators in the world. Individual financial investigations may take hundreds of hours and require the scrutiny of many thousands of financial records and tax statements. The agents focus their investigative efforts on legal-source tax crimes, illegal-source financial crimes, and narcotics and terrorist-related financial crimes. Agents also investigate public and governmental corruption, tax evasion, health care fraud, telemarketing fraud, money laundering, and other forms of financial fraud. IRS agents have one of the highest conviction rates among federal law-enforcement agencies, and many of the people whom they help to convict pay severe fines; some are awarded lengthy prison sentences.

Financial Crimes Enforcement Network (FinCEN)

The Financial Crimes Enforcement Network (FinCEN) is tasked with bringing people and information together to fight the complex crime of money laundering , which is now considered to be the third-largest business in the world. FinCEN was established by the Treasury Department in 1990, and since its inception it has worked to maximize information sharing and gathering among all branches of law enforcement and its other partners in the regulatory and financial sectors.

FinCEN’s network system encourages cost-effective methods to combat money laundering both domestically and globally. FinCEN has been designated by the Department of the Treasury as one of the principal agencies to establish, oversee, and implement policies to detect and prevent money laundering, terrorist financing, and international organized crime financial activities. FinCEN’s primary goals are to support law-enforcement investigative efforts, foster interagency and global cooperation against domestic and international financial crimes, and provide U.S. policymakers with strategic analyses of domestic and worldwide money laundering developments, trends, and patterns. FinCEN officials try to accomplish these goals through information collection, analysis, and sharing, as well as technological assistance and innovative, cost-effective implementation of the Bank Secrecy Act and other Treasury authorities. FinCEN offers online access to both national and international law-enforcement agencies who are deeply involved in the fight against money laundering.

FinCEN’s staff includes approximately two hundred employees, many of whom are intelligence research specialists from both law-enforcement and financial communities; law-enforcement support staff; and law-enforcement and legal analysts. In addition, at any given moment about forty long-term detailees from twenty different law-enforcement and regulatory agencies around the United States work in the bureau. As members of a collective bureau, these individuals are tasked with connecting the links among the individuals and financial institutions who engage in the illegal act of money laundering. This task is quite arduous; however, FinCEN maintains and operates one of the largest repositories of information on money laundering activities available to law enforcement nationally and internationally.

Office of Inspector General

The Department of the Treasury’s Office of Inspector General (OIG) was established in 1989 by the secretary of the treasury. The OIG is led by an inspector general who is appointed by the president of the United States with the consent of the US Senate. The inspector general reports indirectly to the secretary of the treasury through the deputy secretary and provides the secretary with independent and unbiased reviews of all department operations.

The inspector general is also required to keep both the secretary and the entire Congress up to date on all problems and concerns relating to the administration of Treasury Department programs and operations. Serving with the inspector general is a deputy inspector general, who is responsible for assimilating all current bureau reports and investigations. In addition to the inspector and deputy, the office keeps a staff of one hundred full-time civil servants who are responsible for record keeping, external auditing, report writing, and internal investigations.

In regard to investigations, it is vital that all erroneous or criminal behavior be dealt with at once. Audits and investigations that indicate any form of specious or suspected criminal activity are usually passed on to the Department of Justice for further investigation and appropriate action. It is the main goal of the office of the inspector general to act as an internal investigation mechanism for the Department of the Treasury so that a fiduciary environment in which the US economy can grow and prosper can be maintained.

One of the main tasks of the civil servant staff is to create and submit semiannual reports on the activities and investigations of the inspector’s office. Disclosures of problems, abuses, and deficiencies in the Treasury Department are highlighted and brought to the attention of the Congress and the secretary of the treasury. The reports also offer recommendations of what the department should do with regard to corrective action plans when particular abuses and deviancies are reported. Overall, the office of the inspector general plays an integral role for the Department of Treasury by making sure that all operations of the twelve bureaus are carried out efficiently and without corruption or deceit.

Bibliography

Berson, Susan A., and Joseph B. Darby. Federal Tax Litigation. New York: Law Journal, 2024. Print.

"Bureaus." U.S. Department of the Treasury, home.treasury.gov/about/bureaus. Accessed 11 July 2024.

Johnson, David. Illegal Tender. Washington, DC: Smithsonian Inst., 2000. Print.

Melanson, Philip H., and Peter F. Stevens. The Secret Service: The Hidden History of an Enigmatic Agency. New York: Carroll, 2002. Print.

"Orders and Directives." U.S. Department of the Treasury, home.treasury.gov/about/general-information/orders-and-directives. Accessed 11 July 2024.

The Use and Counterfeiting of U.S. Currency Abroad. Washington, DC: US Dept., of the Treasury, 2003. Print.

Yancey, Richard. Confessions of a Tax Collector: One Man’s Tour of Duty Inside the IRS. New York: HarperCollins, 2004. Print.